Yanlord acquires 50% stake of a Shanghai Youyou Group subsidiary for CNY1.65bn

Acquisition is among the significant opportunities the company capitalises on to further enhance its future development despite current volatile market conditions.

Singapore Mainboard listed Yanlord Land Group Limited (Yanlord¨), a real estate developer focused on developing high-end integrated commercial and residential property projects in strategically selected high-growth cities in the People’s Republic of China (PRC) announced Friday its acquisition of a 50% equity ownership of Shanghai Renpin, a wholly-owned subsidiary of Shanghai Youyou Group, for approximately RMB1.655 billion.

With this latest acquisition, Yanlord will gain a 50% ownership of Shanghai Renpin’s 148,363.36 sqm GFA prime residential development site in one of Shanghai’s most prestigious international community district, the Century Park International Community District.

Ideally situated in close proximity to the Lujiazui Financial District, the site is located within the key residential district of the minor Lujiazui Financial Centre and is bordered by the city’s arterial thoroughfares such as Jin Kang Road, Pujian Road and the Yanggao South Road. The site has a plot ratio of approximately 2.66 times which translates into an acquisition cost of approximately RMB22,177 per sqm. Under the terms of the share transfer agreement, Yanlord will complete the payments for the acquisition by end July 2012, according to a Yanlord report.

In addition to its proximity to the city’s financial centre, the site is also surrounded by a comprehensive suite of amenities such as the lush natural surroundings of the million square metres Century Park, the Shanghai Oriental Arts Centre and the Shanghai Science Museum. Capitalising on the continued eastward expansion of the Lujiazui Financial District as well as strategic initiatives to develop the area into a key financial and commercial hub such as the planned 2 million sqm regional financial centre, the site seeks to offer residents with homes that will meet both the requirements of their busy business schedules as well as their recreational needs.

Commenting on this latest acquisition, Mr Zhong Sheng Jian, Yanlord’s Chairman and Chief Executive Officer, said, “While current market conditions remain volatile, there are significant opportunities that developers such as Yanlord can capitalise on to further enhance its future development. Building on our established track record of developing landmark developments near the Century Park District such as Yanlord Riverside City, this latest site is one of the few remaining sites in the area suitable for the development of a high-end international community and exemplifies Yanlord’s continued confidence in the potential of the Shanghai real estate sector. Ideally situated in a prime location and attractively priced, this site will undoubtedly further augment our prime landbank holdings and is expected to contribute significantly to our future growth.”